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Just before the opening of the Beijing Car, the first annual meeting of Chinese auto parts enterprises was held in Beijing. In the speech on the morning of June 7th, Tian Yushi, General Manager of FAW-Fuzhou Automobile Parts Co., Ltd., “The challenges and countermeasures faced by FAW-Fuzhou Auto Parts Co., Ltd.†gave a lot of Chinese automotive parts and components in attendance. The company breathed a sigh of relief, and the reaction of the foreigners of these multinational companies can only shake their heads frequently.
What did Tian Yu say in the end, so that people in the field reacted so strongly?
Tian Yu’s opening remarks are as follows: Today's meeting is our own annual meeting of auto parts companies. Of course, I can tell my heart in front of my family. If I hurt someone in the audience, please be sure. understanding.
In the next few tens of minutes, I believe every word in Tian Yu shocked all the audience present.
The days of OEMs are getting better and better, and our living space is getting smaller and smaller
At the time of Tian Yu, he served as FAW Party Committee Organization Minister, FAW Party Committee Director, FAW General Manager Assistant. Since 1998, he has served as Assistant General Manager of FAW Group and General Manager of FAO. Tian Yushi said that he was the "last emperor" of China's last centrally-owned auto parts company. He said to the delegates in a self-deprecating manner that every one of you is a property owner of Folio. If I don't do well, I will be sorry for you. What he meant was that Fuao was a pure state-owned enterprise. But even a company of this nature is no different from other companies.
Tian Yushi said that, as with all Chinese auto parts companies, Foosom’s biggest challenge is “The vehicle factory is our God. Their days are getting better and better, and our living space is getting more and more. small".
Tian Yushi thinks that pressure comes from many aspects. The first is the pressure from the international market. With China's accession to the WTO, import tariffs for parts and components have dropped to 15%, and a large number of parts and components have started to flood the domestic market. Imports in 2003 amounted to more than 6 billion euros, equivalent to 30% of the annual sales of the domestic parts and components industry;
Followed by the lure of China's auto industry. According to experts of the Development and Research Center of the State Council, the average profit of the Chinese car industry is about 28%, which is rare in the world. Under the temptation of huge profits, SKD's production methods are prevalent and most of them are mid- to high-end models of foreign brands. In order to maximize profits, domestic companies and foreign capital for SKD's production methods are on the same beat. Tian Yushi said that nearly 30% of all new cars that were newly listed in 2003 were imported. Tian Yushi said that he did not understand why the government would encourage this mode of production.
The third is the pressure from foreign companies. Tian Yushi thinks that the so-called new models that are currently being put into China are not developed in China. Even if some new models that claim to be in synch with the world, they all already have well-established parts and accessories bases in foreign countries. You must produce them in China. , but the supporting parts must be imported by me. "Who are these companies? I don't name them. Everyone knows that." Tian Yushi believes that one of the important reasons for the poor distribution of domestic parts and components companies is that our parts and components companies have poor matching capabilities. There are very few of them. The companies supporting different OEMs, as well as the limited output of some OEMs, are making it impossible for parts and components companies to form economies of scale.
The fourth is pressure from product certification. A new model is launched in the domestic market, and domestic parts companies want to supply it, but they cannot, because you must pass the certification of foreign parts manufacturers. Originally, those foreign component makers were already suppliers of components for that new model. Now that you have to take away its rice bowl, how can it allow you to successfully pass the quality certification and how can you be willing to give you a certificate?
The fifth is pressure from foreign procurement strategies. In those purchase orders of foreign-funded enterprises or joint ventures, if the purchase volume is small, it may be abandoned. If the purchase volume is large, never give up. Everyone knows that a procurement center has been established in Beijing and that “module-type†supply has been implemented. Most of the foreign-funded purchases are made up of such modular components. Most of the components that make up such modular components are imported parts. This has caused China's parts suppliers to become second-tier suppliers in the true sense, while foreign-funded enterprises are the real first-tier suppliers.
The sixth comes from the pressure of development capabilities. Although the new car we produce claims to have a localization rate of 40%, the most important parts of a car, such as engines, transmissions, or fuel injection systems on engines, active and passive safety systems in cars, electronic control systems, etc. Almost all products with high added value are supplied by foreign manufacturers. Our spare parts supply only stays in low-margin products such as audio and interiors. Delphi has almost wiped out the electronic control system in the Chinese automotive industry.
The seventh comes from the pressure of exchange rate changes. It is estimated that so far the euro has appreciated by nearly 30%. The pressure of the euro’s appreciation on domestic companies has brought a lot of pressure. The words of Li Wu, the general manager of FAW-Volkswagen’s sales company, describe it as “a heavy lossâ€. He said that if the euro rises by one point, FAW-Volkswagen’s profits will lose 100 million yuan.
Eighth pressure from global procurement. Tian Yushi thinks that the so-called global procurement is a "one-sided theory." Emphasis on theory can be, but it's not easy to really do it. Because this will involve the interests of the nation and the company. When it really affects these two fundamental interests, it will put the so-called global purchasing theory aside. People will use this theory to beat us, and some of us still do not realize the mysteries and use it to fight their own people. Tian Yushi believes that Delphi, Denso and other companies have all been spun off from their original OEMs. The annual production capacity of 67 million vehicles is sufficient to support them. Our auto factories have only a few markets, and of course we cannot support them. Parts companies. This is like a 2-year-old child playing a boxing match with a 20-year-old youngster and how he might win. The modern procurement system that wants to enter Toyota is inaccessible, because Toyota already has its own supply system. If it is necessary to go in, it must pay more than 10% of the cost. The prospect of doing so is "destroying the whole army."
Ninth pressure from the domestic vehicle market. In the past two years, the domestic vehicle market has continuously lowered its prices, and the most important part is the parts and components companies. Due to the constraints of various conditions, many parts and components companies in China can only supply one vehicle factory. As automakers continue to cut their prices for market share, parts suppliers have become lambs for anyone to annihilate. There is no way.
The tenth came from the pressure of foreign bids. Tendering is not terrible. Everyone stands on the same starting line and competition is all there is to be. But what's terrible is that domestic companies are rolling over each other and pushing prices down. I am 100, you are 80, he is 60. Foreigners said that they would be 6 points lower than the international market, and domestic companies would dare to say that they could be 10 points lower than that. As a result, foreigners earned, and we lost ourselves.
After complaining of a bitter stomach, Tian Yu did not forget to give the government some suggestions. He said that he hopes the government can solve the SKD production methods; use the market to exchange some of the technologies we really need; use administrative measures to prevent domestic companies from infighting and reduce internal consumption; limit the entry rate of foreign-owned parts and components companies; encourage funds to parts and components. Industrial flow and so on. Tian Yushi said that he hopes that the China Automobile Engineering Society and the China Machinery Industry Enterprise Management Association, which organizes the annual meeting of parts and components companies, can reflect his opinions "upwards."
The world-famous auto parts manufacturers have come to China to invest in and establish technical cooperation with factories, presenting new challenges to domestic enterprises.
Just three days after Tian Yu’s remarks, Bosch held a press conference in Beijing and said that Wuxi Weifu Group officially established a new joint venture company with a registered capital of US$200 million to provide China with a diesel common rail system. Bosch owns 67% of the shares in the new company.
According to statistics, in 2003 Bosch’s sales (including exports) of all companies in China increased to US$1.3 billion. If the changes in exchange rates were not considered, sales increased by 25% from the previous year. Among them, the sales of automotive technology exceeds Bosch’s total revenue in China by more than half. In response to this, Bo Xie, general manager of Bosch Automotive Diesel Systems Co., Ltd. said that "This has played a decisive role in Bosch's outstanding achievement." According to statistics, since the 1980s, Bosch has established 10 representative offices, 5 trading companies and 1 trade office, 9 wholly-owned enterprises and 9 joint ventures in China, with a total investment of US$600 million in China. Qi Kejun said that since January this year, Bosch has produced ABS systems in China and plans to start producing ESP systems in China in 2005.
As the world’s large-scale automotive multinationals have entered China, world-renowned auto parts manufacturers have also come to China to invest in factories or establish technical cooperation with domestic auto parts factories. On the one hand, they have promoted the construction and development of China’s auto parts industry. On the one hand, it has also intensified the competition in the domestic auto parts industry.
According to statistics, 1,200 of the 5,000 auto parts companies in the country are foreign-invested enterprises. The world’s nine largest automotive multinationals: GM, Ford, Dai-Ke, Volkswagen, Toyota, Renault-Nissan, Peugeot-Citroen, Honda, and BMW have all entered China. When multinational companies such as Volkswagen, General Motors, and Citroen invested in China, they also drove domestic cooperative companies to invest in China in order to reduce costs and increase the degree of localization. Such as Delphi, Bosch, Eaton, Michelin and other world-renowned auto parts multinational companies.
Some industry insiders believe that the profound changes in the market environment have caused China's parts and components industry to encounter five deep problems in its competitive strength.
The first is that the product structure cannot adapt to changes in the market structure. China's spare parts industry has been developed on the basis of commercial vehicle parts. Today, with the rapid development of the passenger car market, apart from the development of individual companies in the expansion of the passenger car parts market, most of the company’s spare parts investment Failure to fully exert its effectiveness, even lost the opportunity for technological upgrading.
Second, research and development capabilities are difficult to adapt to the needs of technological development. R&D capability is one of the most important core competencies of component companies. International component suppliers place great emphasis on R&D capability and investment. For example, Wandu in South Korea and Bellow in Germany each invest 6% in R&D. -7%, but also has a complete set of scientific and comprehensive R & D system. Most of the experimental equipment in China did not play a good role, and the R&D capability remained at the level of adaptive R&D.
Third, marketing lacks effective means. The main performance is to rely on the role of the sales department and sales staff in the market. The second is to focus only on the possession of the existing market and ignore the pre-development of the potential market.
Fourth, the manufacturing capacity of China's auto parts industry is still a relatively weak link and cannot meet the quality requirements of users. Most of the parts and components companies in China have passed the third-party certification of ISO9000 series quality system standards, and some companies have also passed the third-party certification of QS9000 or TS16949 quality system standards, but overall, the lack of manufacturing capacity is quality. Control the weakest link. The internationally advanced parts and components companies have delivered defective products at a rate below 100PPM, and there is still a long way to go before this level of spare parts enterprises in China.
Fifth, China’s auto parts companies do not have the advantage in cost control capabilities. With the increasingly fierce competition in the entire vehicle market, price warfare is one of the frequently used methods, and vehicle companies must inevitably reduce the price reduction to parts suppliers. At the same time, under the competitive principle of QCDS or QCDD, the cost factor is the best quantifiable factor and the most sensitive factor in market competition. However, the cost control capability is not the advantage of China's parts and components companies. On the one hand, minimizing tangible waste has been recognized by people, and intangible waste has not been recognized by everyone, such as the idleness of assets and ineffective operations. On the other hand, redundant personnel, inflexible employment mechanisms, and overly heavy social responsibilities have made the research on the core of the business not sufficient. How to obtain the highest additional value at the lowest cost will become an effective way for companies to reduce costs.
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